Approval to hold a stake in a financial sector company of more than 15% - CSF Pty Limited

Administered by Department of the Treasury

Legislation au C2016G00959 In force Gazette

Legislation content

 

Approval to hold a stake in a financial sector company of more than 15%

Financial Sector (Shareholdings) Act 1998

SINCE

 

  1. CSF Pty Limited as trustee for MyLifeMyMoney Superannuation Fund ACN 006 169 286 (the applicant) has applied to the Treasurer under section 13 of the Financial Sector (Shareholdings) Act 1998 (the Act) for approval to hold a stake of more than 15% in Transcomm Credit Co-operative Limited ACN 087 651 750 (the Company), a financial sector company under the Act; and

 

B.            I am satisfied that it is in the national interest to approve the applicant holding a stake in the Company of more than 15%,

 

I, Stephen Glenfield, a delegate of the Treasurer, under subsection 14(1) of the Act, APPROVE the applicant holding a stake in the Company of 100%.

 

Under subsection 16(1) of the Act, this Approval is subject to the conditions set out in the attached Schedule.

 

This Approval comes into force on the date that the applicant acquires a 100% stake in the Company and remains in force indefinitely.

 

Dated 20 June 2016

 

[Signed]

 

……………………………

Stephen Glenfield

General Manager

Specialised Institutions Division

South West Region

 


Interpretation

 

In this Notice:

financial sector company has the meaning given in section 3 of the Act.

stake in relation to a company, has the meaning given in clause 10 of Schedule 1 to the Act.

unacceptable shareholding situation has the meaning given in section 10 of the Act.

Note 1 Under paragraph 16(2)(a) of the Act, the Treasurer may, by written notice given to a person who holds an Approval under section 14, impose one or more conditions or further conditions to which the Approval is subject. Under paragraph 16(2)(b) of the Act, the Treasurer may revoke or vary any condition imposed under paragraph 16(2)(a) of the Act or specified in the Notice of Approval. The Treasurer’s power under subsection 16(2) of the Act may be exercised on the Treasurer’s own initiative or on application made to the Treasurer in accordance with the requirements of subsection 16(4) of the Act, by the person who holds the Approval (see subsection 16(3) of the Act).

Note 2 A person who holds an Approval under section 14 of the Act may apply to the Treasurer under subsection 17(1) of the Act, to vary the percentage specified in the Approval.

Note 3 Under subsection 17(6) of the Act, the Treasurer may, on the Treasurer’s own initiative, by written notice given to a person who holds an Approval under section 14, vary the percentage specified in the Approval if the Treasurer is satisfied it is in the national interest to do so.

Note 4 The circumstances in which the Treasurer may revoke a person’s Approval under section 14 are set out in subsection 18(1) of the Act.

Note 5 Section 19 of the Act provides for flow-on approvals.  If an Approval has been granted for the holding of a stake in a financial sector company and the financial sector company is a holding company for an authorised deposit-taking institution or an authorised insurance company, then an approval is taken to exist for the holding of a stake of equal value in each financial sector company that is a 100% subsidiary of the holding company.

Note 6 Under section 14 of the Act, the Treasurer must give written notice of this Approval to the applicant and financial sector company concerned, and must publish a copy of this Notice in the Gazette.

Note 7 Under section 11 of the Act, a person or 2 or more persons under an arrangement are guilty of an offence if the person(s) acquires shares in a company and the acquisition has the result, in relation to a financial sector company, that:

(i)            an unacceptable shareholding situation comes into existence; or

(ii)          if an unacceptable shareholding situation already exists in relation to the company and in relation to a person – there is an increase in the stake held by the person in the company;

and the person(s) was reckless as to whether the acquisition would have that result. A maximum penalty of 400 penalty units applies or by virtue of subsection 4B(3) of the Crimes Act 1914, in the case of a body corporate, a penalty not exceeding 2,000 penalty units. By virtue of section 39 of the Act, an offence against section 11 is an indictable offence.

Note 8 Under section 32(3) of the Act, if a person has engaged in or is proposing to engage in any conduct in contravention of a condition to which an approval under section 14 is subject, the Federal Court may, on the application of the Treasurer, grant an injunction:

(i)            restraining the person engaging in the conduct; and

(ii)          if in the court’s opinion, it is desirable to do so – requiring the person to do something.


Schedule – the conditions imposed on this Approval

 

The aggregate market value of the Company’s total assets must not at any time exceed 5% of the aggregate market value of the total assets of the MyLifeMyMoney Superannuation Fund.

 

Overview

The Financial Sector (Shareholdings) Act 1998 was enacted to regulate the ownership and control of financial sector companies, addressing the need to maintain stability and integrity within Australia's financial system by preventing unacceptable concentrations of shareholdings that could threaten the stability of financial sector companies. This Act is a Commonwealth legislation, enacted by the Parliament of Australia, with the policy objective of ensuring that financial sector companies are not subject to undue influence or control that might compromise the financial system's stability. The Act allows the Treasurer to approve or disapprove shareholdings in financial sector companies that exceed 15%, ensuring that such shareholdings do not create unacceptable situations detrimental to the national interest. The Act provides a mechanism for the Treasurer to impose, vary, or revoke conditions on approvals and to take necessary action against non-compliance, including seeking injunctions from the Federal Court. This legislation is crucial in maintaining the robustness of Australia's financial institutions, ensuring that they remain resilient against potential threats from excessive or strategic shareholdings. By providing the Treasurer with the authority to manage and monitor shareholdings in financial sector companies, the Act aims to safeguard the financial system's stability and protect the interests of consumers and the broader economy. The Act's framework is designed to prevent situations where an individual or entity might gain undue influence over a financial sector company, thereby protecting the financial system from instability and ensuring that it operates in a manner that supports economic growth and financial stability.

Scope and Application

The Financial Sector (Shareholdings) Act 1998 applies to individuals and entities seeking to acquire a significant stake, more than 15%, in financial sector companies. The Act aims to safeguard the stability and integrity of the financial sector by regulating shareholdings that could lead to unacceptable situations affecting financial entities' operations and the national economy. The Act's jurisdiction is federal, covering entities across Australia, and it extends its reach to both domestic and foreign shareholders. Exclusions and exemptions are not explicitly stated in the Act, but specific approvals may be subject to conditions that the Treasurer can impose or vary. The Act’s application can be extended or restricted through subordinate instruments, allowing for adjustments based on changing circumstances or policy objectives. The approval granted to CSF Pty Limited, as trustee for MyLifeMyMoney Superannuation Fund, to hold a 100% stake in Transcomm Credit Co-operative Limited, is subject to specific conditions and can be varied or revoked by the Treasurer under the Act's provisions.

Key Provisions

The Financial Sector (Shareholdings) Act 1998 (the Act) governs the acquisition of significant stakes in financial sector companies. Under section 13, any party seeking to acquire more than 15% of a financial sector company must apply for approval from the Treasurer. In this case, CSF Pty Limited, as trustee for MyLifeMyMoney Superannuation Fund, has applied for and received approval to hold a 100% stake in Transcomm Credit Co-operative Limited, a financial sector company. This approval is granted under section 14 and is subject to specific conditions outlined in the attached Schedule. The Act imposes several obligations on the applicant and the company. Under section 16, the approval is conditional, meaning that the approval holder must adhere to the conditions set out in the Schedule. These conditions include ensuring that the aggregate market value of the company's total assets does not exceed 5% of the aggregate market value of the total assets of the MyLifeMyMoney Superannuation Fund. Furthermore, the Treasurer retains the power to impose additional conditions, vary existing conditions, or revoke the approval altogether under sections 16(2) and 18(1) of the Act. Failure to comply with the conditions of the approval, or engaging in conduct that contravenes a condition, can lead to serious consequences. Under section 11, any person who recklessly acquires shares in a financial sector company resulting in an unacceptable shareholding situation is guilty of an offence. This includes cases where such an acquisition increases an existing unacceptable shareholding situation. The maximum penalty for such an offence is 400 penalty units for an individual and 2,000 penalty units for a body corporate, as stipulated in the Crimes Act 1914. Additionally, under section 32(3) of the Act, the Federal Court can grant an injunction to restrain a person from engaging in conduct that contravenes the conditions of an approval, or to require the person to undertake certain actions if deemed desirable by the court.

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.